Evan Schuman's StorefrontBacktalk

eBay this month has joined Amazon in experimenting with same-day delivery. Although both are delivering same-day, they are doing it in nearly the opposite way.

Amazon’s effort is being offered at a Premium price, while eBay is offering close to loss-leader pricing. Amazon—rightly or wrongly—is seen as a threat to brick-and-mortars, whereas eBay is emphasizing that it’s buying from partner retail chains at full price. Amazon’s same-day delivery requires very early morning orders and as long as 13 hours for delivery, whereas eBay is targeting—and, it claims, delivering—everything within one hour.

eBay’s trial run seems to be deliberately low-cost and extra-fast delivery to truly see who would use such a service under the best of conditions. It’s highly unlikely that a national rollout could continue such specs. eBay’s approach isn’t all good for retail partners; only the eBay brand is shown, which reduces the chains to unseen suppliers—albeit well-compensated unseen suppliers.

Some of those retail partners are Nordstrom, Best Buy, Target, Macy’s, Toys”R”Us and Bloomingdales.

The trial, which has no announced end-date, is being done in densely populated San Francisco. It works simply enough. Someone goes to the eBay pages for this experiment, searches through the goods offered from retail partners (which happen to be the partners with eBay’s shop-local Milo program) and makes a selection. A courier is then dispatched to go to that retailer, pay for the item and drive it to the customer, with a target of a one-hour delivery. The experiment is offering participants $15 off the first order and is adding three free deliveries. Afterward, each delivery costs $5, which might barely cover gas costs for the courier.

eBay Spokesperson Lina Shustarovich said the program was designed to encourage local shopping, with retail partners. “We think it’s really important to (encourage) local shopping. This allows them to still shop locally but someone bring them the product. For the stores, what they care about is getting more sales,” she said.

She stressed that couriers now just buy the store products like any other customer—no volume discounts yet—and that eBay is “using this time to figure out” how such a service might be run and, candidly, whether it makes sense to run it at all.

Done differently, the eBay model could incorporate quite a few efficiencies. By aiming for a three- or four-hour delivery instead of one hour, it could give couriers more time to wait to see if other orders would be placed with those retailers. This approach would enable multiple simultaneous pickups. It’s unlikely that customers would find a few hours’ wait much of a hardship.